Smart Contracts

Smart contracts are a very interesting part of cryptocurrency’s development over time. They have been available at least back to the early days of Bitcoin, but they have been more popular (or simply discussed more) in recent years. A smart contract is an agreement between two parties to do a particular thing when conditions are met. In basic computer speak it’s like saying “if this happens, then you need to do that”.

One basic (and very useful) function of a smart contract is that they are immutable. This basically means that they can not be changed. If you enter an agreement with someone with a particular arrangement, it is not subject to change. You will get what you agreed upon.

One basic (and very practical) example of a smart contract would be a retail transaction. If someone agrees to purchase a product from you, a smart contract can be set in place to pay the seller upon receipt of the product. Another example would be if you had agreed to pay someone $500 / week for work complete, you could have a smart contract set to pay the employee at a specific interval of time.